UniPayGateway

September 20, 2018
Written by
James Davis
Written by James Davis
Senior Technical Writer at United Thinkers

Author of the Paylosophy blog, a veteran writer, and a stock analyst with extensive knowledge and experience in the financial services industry that allows me to cover the latest payment industry news, developments, and insights.

My works have been cited across media and payment blogs. I do my best to help businesses make the most efficient financial decisions that can positively and significantly improve their business growth.

Whether you are a seasoned investor or just starting out in the world of payments, my writing is designed to be accessible to everyone and help people navigate the complex world of payments. So if you want to stay up-to-date on the latest trends and insights in the payment industry, be sure to check out Paylosophy and my published works.

Reviewed by
Kathrine Pensatori
Product Specialist at United Thinkers

Product specialist with more than 10 years of experience in the Payment Processing Industry. I help payment facilitators and PSPs solve their various payment processing issues. On a regular basis, I work with a team of knowledgeable technical people in the space, and I am passionate about finding creative solutions to the challenges presented by the Payments Industry.

I would be happy to help with any questions you might have regarding credit card payment processing, merchant services, EMV certifications, the various ways of becoming a payment facilitator or a payment platform, as well as any other Payment Industry related issues you might be struggling with. Feel free to follow me on Quora, and don’t hesitate to send me links to the specific Quora questions you would like me to answer.

Direct Integrations With Credit Card Networks

What is more beneficial to license an open source payment gateway product or develop own payment gateway?

Some businesses that use the services of third-party gateway providers often wonder if it would be more beneficial for them to license an open source payment gateway product or develop a payment gateway of their own. Will such a transition allow them save on credit card processing fees?

For each particular business model case the answer might be different. Credit card merchant fees include different cost items. There are credit card transaction fees charged by a payment gateway itself. Other fees are charged by acquirers and card brands (cost of credit card processing paid for usage of their card networks).

Transaction processing fees paid to card brands have to be paid in any case, while interchange costs and settlement costs can be eliminated only through direct integrations with card networks (relevant only under extremely large processing volumes). The only cost item that can be significantly and relatively easily reduced is the amount of surcharges paid to acquirers.

On the other hand, if you develop a payment gateway of your own from scratch or license an open source payment gateway product, then new cost items will emerge. These will include the cost of license, PCI audit, development and support efforts, server maintenance etc.

So, if you decide to switch to a payment gateway product of your own, it makes sense only if your savings from elimination or reduction of certain fees will offset the new costs, induced by the new solution.

Learn more about the pros and cons of having an open source payment gateway of your own from our respective article on Paylosophy.

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